Speak it softly …“ flat ” will be the new “ up ” in 2018
Well , we didn ’ t really need the MAG filings to remind us what a difficult market we are faced with , but it certainly has thrown current trading into sharp focus . I don ’ t intend to get into the MAG issue as such here . Enough has already been said and written , and much of it ill-informed and downright inaccurate . Of course , any business getting into trouble is a bad thing , regardless of how and why , and , of course , when it is a ‘ major ’ such as MAG , the ripples spread far and wide . In my conversations with MAG CEO Andy Graves , it is clear that he is sensitive to the damage this is likely to be doing to the group ’ s vendors , especially to those for whom Tucker Rocky / Biker ’ s Choice is a primary or even exclusive income channel . I know from those who have made contact with me that there is “ hurt out there ”, but since I am writing this before the 30 day post-filing cycle has lapsed , at this stage all I will say is that from my dealings with MAG since November 15th ( the filing date ), it is clear the company is only too well aware of its importance to its “ trusted partners ” and of the importance that trust has for dealer sales moving forward . No product lines , no ball game ! For now though , we are all in a holding pattern . What I would like to pick up on here though is the dialog that I had with Graves about the market cycle that has led MAG to this place , and the likely evolution of that cycle moving forward . He is of the view that logic dictates that even if we are destined to traverse the bottom of another one of those very broad U-curves that have haunted us for a decade now , there are more reasons to believe that the worst of the decline is behind us . Even if “ flat ” is the new growth for now , there are signs for modest optimism .
I don ’ t dare put any kind of timescale on it ( who would ), but if we do have a couple of years of a level playing field , then , barring any kind of macroeconomic calamity or socio-political upheaval , the logic is that growth should follow . My observations are mostly informed by my reading , by having been to so many shows recently , especially in Europe , and after spending months scrutinizing so much of what is going on with the custom bike community at this time , in advance of getting heavily into October 2018 AMD World Championship and INTERMOT ‘ Customized ’ preparations , and comparing that to what was being seen at this point in the cycle 24 and 48 months ago . In those contexts , there is some evidence that the so-called “ new gen ” of professional customizers and the riding cohort they work with ( they are not just customers , but collaborators , partners even ) are already starting to pay more attention to air-cooled and liquid-cooled V-twins than might yet have been expected .
‘ atrophy will become stability ’
At this stage it is largely older and less expensive models fuelling the ongoing “ retro ” passion , rather than new examples . In price point terms even at the Scout , Sportster and Street end of the market , credit apps have not yet returned to being the new normal for those “ younger ” enthusiasts , and especially not those entering the custom market for the first time . But entering it they are . In turn the first members of that new generation , those that inspired the emergence of new media brands some five or more years ago , inspired the new fashions and adopted the new uniform and triggered the new generation of “ events ” ( they are really tribal gatherings rather than shows as we know them – which sounds historically familiar ) are already beginning to morph into that reassuringly familiar , if migratory , species known as lesser spotted “ consumers ”. Additionally , and as Harley CEO Matt Levatich put it in January 2017 , used motorcycles are coming into play as the new entry level platform , and the firming up of used prices is as much to do with younger buyers as it is to do with hard pressed middle-aged riders who , for one reason or another , have not yet started to enjoy the trickle-down benefits that orthodox economics would suggest should come with a booming employment market . For whichever range of reasons that may be , the classic interpretation of a strong used bike market is its positive impact on parts and accessory sales , customizing and riding lifestyle engagement . Are you seeing that yet ? No , of course not , I realize you are not . But , if , as I believe will be the case , we are going to see the atrophy become stability , then , in all probability , you will … at some stage . Factor into that what is happening to the market share that cruisers are taking of currently available sales of new motorcycles in the United States ( relative to other street bike offerings and sport bikes , cruisers are holding up better , believe it or not ) and the eventual impact that Harley ’ s new model blitz and the entry into the market of competition in the form of Indian Motorcycle and , actually , reaching for the off-switch , could be interpreted as being premature . Is all this a trend yet ? No ! Is it something to bet the farm on ? Hell no ! But is there logic there ? Well , yes , actually there is . We just all have to “ hang on in there ” in the meantime and not lose sight of the twin pillars of business recovery that have always characterized the winners versus the losers in emergence from any downturn - investing in brand profile and new products .
Robin Bradley Co-owner / Editor-in-Chief robin @ dealer-world . com
4 AMERICAN MOTORCYCLE DEALER - DECEMBER 2017 www . AMDchampionship . com